In a Labor-Market Pooling Equilibrium with High-Skill and Low-Skill Workers

question 23

Multiple Choice

In a labor-market pooling equilibrium with high-skill and low-skill workers and where a costly educational degree is used as a signaling device,

• A) the high-skill workers' wage is larger than the low-skill workers' wage.
• B) the low-skill workers' wage is zero.
• C) the high- and low-skill workers receive the same wage.
• D) the high-skill workers' wage is equal to the low-skill workers' wage plus the cost of obtaining a degree.

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Definitions:

School Lunch

A meal provided to students at school, typically in the middle of the school day.

Maple Syrup

A natural sweetener produced from the sap of maple trees, commonly used as a topping.

Liters

A unit of volume in the International System of Units (SI), used to measure liquid capacity, equal to 1,000 cubic centimeters.

Pints

A unit of volume or capacity typically used for measuring liquids, equivalent to 1/8 of a gallon or approximately 473 milliliters in the United States.